Delivery and packaging are becoming key areas of competition among retailers as consumers not only start to tighten their belts, but also start to demand delivery when they want it in packaging that is sustainable.
A study out this week finds that two thirds of shoppers on marketplaces consider delivery to be the number one deal breaker. Marketplaces have done a great job of consolidating goods into one place, they have done much to force prices down – now they are having to do battle based on the delivery options that they, well, deliver.
This means that delivery has to be fast, but it also has to be flexible. These two demands, in fact, trump cost of delivery for the majority of shoppers, with just 28% saying that free delivery is essential.
Separately, shoppers have declared that they want more sustainable packaging for the goods they have delivered – and are prepared to pay a not inconsiderable premium for it. In fact, a third say they would be prepared to pay between 1 and 4% of the value of the goods, while 39% would go as high as 5%. 15% would even go as high as 20% surcharge for sustainable packaging.
Together, these two facets of fulfilment pose retailers with a conundrum. Consumers in a competitive market need to have their needs and wants met if you are to stay ahead of the competition. However, it comes at a cost. Sorting out fast, flexible delivery isn’t easy and requires a lot of managing.
Likewise, switching from the most cost-effective packaging to something much more sustainable, comes at a cost.
Luckily, both studies indicate that consumers are, for now, prepared to pay for both – although it would be interesting to see if they are so keen to pay for both together. It also is a short-term fix. As the cost-of-living crisis deepens, such largesse will dwindle. Similarly, as every retailer starts to offer these services they will become commoditised – and those that can offer them more cheaply, or for free, will win.